Tenants will now have the option to pay rental bonds off in instalments and further protect their money from mishandling with the launch of a new product.
BONDSURE will enable tenants to apply online to have rental bonds up to $5,000 paid on their behalf by the company, to be repaid over six to 12 months. The product will maximise the chances of renters’ bonds being returned, BONDSURE said. In addition, Australia’s first optional bond insurance will provide cover up to the bond amount for the most common areas of dispute — accidental damage and additional cleaning charges.
“Paying a bond can be an untimely nuisance for tenants, tying up money at the start of the rental period when many people would prefer to spend money on other things,” said BONDSURE chairman, Michael Wood.
“Recouping bonds can also be a real nightmare for some tenants when accidents or disputes over cleaning put the bond in jeopardy.”
The product is flexible, and tenants can take out insurances without getting their bond through BONDSURE, or they can have their bond paid without also securing insurance.
Mr Wood said the product was a “compelling alternative” to payday lenders — who he contends are “exploiting the residential bond market” by offering loans to consumers with comparison rates of over 150 per cent and repayment terms as small as four weeks.
On an average $1,000 loan over 12 months, BONDSURE says it will charge an annual percentage rate of 16 per cent (with additional fees and charges). Bond insurance costs $18 per month.
The insurance component of the product should lead to less bond disputes between tenants, property managers and landlords, CEO Paul Mylott said.